The jewellery industry welcomed government’s decision to scrap the Rs 500 and Rs 1,000 notes citing it as a bold move to curb tax evasion and improve compliance.

“It is a welcome step to curb tax evasion even as people will be inconvenienced for a short period. It is a very bold step for the long run and will benefit people,” All India Gems and Jewellery Trade Federation (GJF) Director Ashok Minawala told PTI here.

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He said after the announcement made by the Prime Minister Narendra Modi last night, people thronged to jewellery shops, which remained open till midnight.

“According to reports from across the country, the business were substantially high, went up around 200 per cent last night. On an average day, the industry does a business of around 2 tonne,” he added.

Last night, the Prime Minister announced that high denomination notes of Rs 500 and Rs 1,000 will no longer be legal tender from midnight as a “decisive” war against black money and corruption, while disclosing a raft of steps to assure commoners that their money is safe. Mumbai Jewellers Association Vice-President Kumar Jain said the prices are soaring in the domestic market and due to demand supply gap gold is being sold at a higher premium.

“Gold price is ruling at Rs 31,900 level per 10 grams, however, in the market gold is sold at a premium of Rs 10,000 per 10 grams taking the total price to over Rs 40,000 per 10 grams,” Jain said.

“The act of demonetising high value currency notes by the government is a decisive and welcome step to curb tax evasion and improve compliance and an important milestone in the journey towards the vision of becoming a cashless economy,” World Gold Council Managing Director, India, Somasundaram PR said.

“This will be transformative for gold as this has the potential to squeeze out the unofficial trade, and drive greater transparency across,” Somasundaram said.

“It is a wonderful move and long overdue. We were seeing a lot of counterfeit currency, which made it difficult for common individuals. (This is) a bold decision, which might cause short term difficulty but is good for long run and will help strengthen our currency,” Gem and Jewellery Export Promotion Council (GJEPC) Praveenshankar Pandya said.

The government’s decision to demonetise Rs 500 and Rs 1,000 notes is a bold and welcome step and good move in the long run, GJF Chairman Sreedhar G V said.

“We were getting reports of shops being open till mid-night till currencies were accepted. Customers buying increased and people did good business,” he added.